Plimer v Roberts and ANOR S144/1997 [1998] HCATrans 238 (19 June 1998)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S144 of 1997

B e t w e e n -

IAN RUTHERFORD PLIMER

Applicant

and

ALLEN ROBERTS

First Respondent

ARK SEARCH ASSOCIATION INC

Second Respondent

Application for special leave to appeal

GLEESON CJ

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 JUNE 1998, AT 2.21 PM

Copyright in the High Court of Australia

MR D.M.J. BENNETT: If it please the Court, I appear for the applicant. (instructed by McCabes)

MR A. RADOJEV: If your Honour pleases, I appear with my learned friend, MR M.B. DUNCAN. (instructed by Bush Burke)

GLEESON CJ: Mr Bennett.

MR BENNETT: Your Honours, the problem which arises in this case has arisen because the States have adopted a provision of the Trade Practices Act which involves the words "trade and commerce" with all their constitutional significance, and then has redefined those words in a way quite different to the conception of it in the federal context, and the issue which arises is how one construes those Acts, which are basically all the same except for the South Australia one, where one has, as here, a quasi-religious organisation engaging in quasi-voluntary, quasi-commercial activities, to put it neutrally.

The section appears on page 128, and your Honours can see the problem very clearly from the two sections on that page. Your Honours will see section 42, at line 7, is identical to the Trade Practices Act:

A person shall not, in trade or commerce, engage in conduct which is misleading or deceptive -

et cetera. Then there are two definitions which, of course, do not appear, and could not appear, in the federal legislation. The first is:

trade or commerce includes any business or professional activity -

and then:

"business includes:

(a) a business not carried on for profit -

Now, the problem is how to apply conceptions such as those developed by this Court in Nelson v Concrete Constructions to that new meaning. What has happened is, four justices of the Federal Court have come up with four different ways of looking at it, or four different matters of definition. Those four ways appear clearly - and we have set out all the passages - at pages 173 to 174. Your Honours will see, starting with Justice Davies, he says, that the definitions can be read consistently with Concrete Constructions and that "business" includes:

a business not carried on for profit.

But he says:

But it is not to be implied from that definition that all non-profit activities constitute a business - - -

GLEESON CJ: Well, that is obviously right.

MR BENNETT: Yes:

or that the existence or absence of a profit-making objective is not a relevant factor in a determination as to whether there is a relevant business activity.

So, one of the things you look at in looking at a non-profit organisation is whether it carries on business for profit. It seems difficult to deal with it that way. The definition says that "business" includes both activities. If one goes to Justice Branson's approach - - -

GLEESON CJ: Just before you pass on from Justice Davies, do you say that what he says is wrong?

MR BENNETT: Yes, we say it is a much wider test than any of these, your Honour. Although one of them - the test taken by Justice Lindgren - is probably the closest.

GLEESON CJ: But all that Justice Davies does is say that something is not to be implied.

MR BENNETT: Well, what he says is that:

the existence or absence of a profit-making objective -

is a relevant factor in determining whether there is a business activity. If one goes to Justice Branson, she says that:

[A] business activity is an activity in business which of itself bears a business character -

That is undefined for the moment, and there is a corresponding statement in relation to professional activity. So, it has got to bear a business character - whatever that means. There is a sentence with a double negative, which is a little difficult to follow, but she says:

It does not seem to me that s4(1) of the FTA (NSW) discloses an intention to include within the notion of trade or commerce an activity which, whilst characteristic of the carrying on of a business (whether carried on for profit or not).....is not in fact undertaken in any business -

If all that is saying is that the requirement that it be in a business trade or profession, the Nelson requirement is still there, we have no problem with that.

GLEESON CJ: I understood that to mean - on its face, it means nothing more than saying if the local mother's club keeps a set of accounts, that does not mean they are carrying on a business.

MR BENNETT: Well, they may or may not be, your Honour.

GLEESON CJ: Because keeping a set of accounts is characteristic of carrying on a business. But she is only saying the fact that you do something that is characteristic of carrying on a business does not, itself, mean you are carrying on a business.

MR BENNETT: Well, I read it rather differently, your Honour. What she seems to be contrasting is the question of whether the activity is characteristic of it on the one hand, and whether it is undertaken in - in other words, we see what that paragraph is doing as confirming the view of this Court in Nelson, that the preposition "in" is important and it is, in effect, a separate criterion. You can find that there is a business, but the activity is not in the business. One has to look at the activity for that reason. But that part of it does not answer the present question. The present question she comes to in the third paragraph, where she says:

It similarly seems to me that s4(1) of the FTA (NSW) does not disclose an intention to include within the notion of trade or commerce an activity which, whilst conducted in the course of a business or profession, does not itself bear the character of a business or professional activity -

So, that seems to be suggesting that what is important, as she suggested in her first paragraph, is that it bear a business character. We would dispute that on the face of the definition. If one looks at the definition on page 128 again:

business includes:

(a) a business not carried on for profit -

and the reference to a business character is rather suggesting the converse. But may I leave that for the moment, because I am going to come back to the way we say the test should be looked at? If one goes to Justice Lindgren, he puts it a different way again. He says the notion is:

activity which is unequivocally and distinctively characteristic of the carrying on -

"of" that should be -

a non-profit business -

It is very hard to work out what that means, but it is certainly a different test to what the others are referring to. It has to be a characteristic:

unequivocally and distinctively characteristic of the carrying on -

of -

a non-profit business.

GLEESON CJ: A possible point of view is that all these are unduly wide and unduly favourable to your side. A possible point of view is that the sort of thing the legislature had in mind when it referred to a business not carried on for profit is a hospital conducted by a charity.

CALLINAN J: Or a co-operative, perhaps.

MR BENNETT: That is one type. Another type is, we would submit, a body which seeks to raise money from the public for a cause, or a purpose; for example, an environmental body or a political body, which may seek, by misleading and deceptive conduct, to raise money from people.

GLEESON CJ: Charitable organisations like the Salvation Army or the St Vincent de Paul Society carry on activities of buying and selling goods or clothes. It may be it is intended to comprehend that kind of thing.

MR BENNETT: If that had been intended, it could have been done with much more precise language than was done. What has been done is simply to extend and, of course, it is being extended at the same time as "trade and commerce" is being extended to any profession, which would include, for example, the medical profession. So, there is, we would submit, a strong argument that something wider than that was intended. But let me show your Honour how Justice Sackville looks at it, because he takes a different view again. He was the trial judge, and he treats it - this is page 174 again - rather like the balancing of tests, where the court sets aside a default judgment, or grants an extension of time. You weigh the strength of the defence on the merits with the seriousness of the delay, and if one is light the other has to be heavy and, so, you are looking at the two quite independent things to find a balance that gets you over the line. He says:

[T]he less commercial the character and objectives of an organisation, the greater the degree of system and regularity required for the organisation's activities to be characterised as a "business" -

So, first of all, he does something that no one else does; he says, "Well, what we are talking about with a business - the characteristic we are concerned about is system and regularity" and, secondly, he says what you have then got to do is weigh, on the one hand, commerciality of objectives, which can only mean profit, and, on the other hand, the degree of system and regularity and, if you have got less of one, you have to have more of the other. The problem with that is illustrated by the table which we referred to. I think it is at page 146.

CALLINAN J: Mr Bennett, could I just say this? It does not seem, to me, that any of the judges were purporting to lay down any comprehensive test for all cases and that everything that each judge would say was said very specifically in the context of this case, and there is no attempt at a definition that will apply, as a matter of principle, to all cases.

MR BENNETT: Your Honour, each judge attacks the problem by setting out what we call a test, in the passages I have set out, and then applying it.

CALLINAN J: But as the Chief Justice has really said, the case could, perhaps, have been decided much more narrowly and that these definitions, if anything, to the extent that they are definitions, and I do not think they are, tend to favour you.

MR BENNETT: Your Honour, it was, we would have submitted, if one stands back from the statute and looks at it in a more general sense, it would be a strong case. You have got an activity being carried on by NARF which raises money. The primary purpose of raising money is to pay it to Dr Roberts to send him to Turkey to carry out the investigations. He, as one of the people who was concerned with the founding of that body, although not technically a member, makes speeches, and his tapes and his videos are sold at these functions, and money is raised from people.

Now, it is difficult to say, in that situation, we would submit, (a) that there is not an activity being carried on which, while not for profit in the sense that someone is seeking to make a profit out of it, certainly people are seeking to make money out of it which will be used for something which they are interested in - - -

GLEESON CJ: Yes, but carrying on your affairs in a business-like fashion does not mean that you are carrying on a business.

MR BENNETT: No, it does not.

GLEESON CJ: A tennis club may carry on its affairs in a business-like fashion, and may be criticised for not doing so.

MR BENNETT: Yes, but here there is more than that. Here there is the raising of money from the public for an objective, and there were sums of up to $10,000 which were dealt with over a given period which were paid to the respondent, and it is the element of making representations to the public in order to obtain money which is used for purposes which we would submit amounts to the relevant non-profit business activity, and we submit that a non-profit business activity - certainly one can have large examples like hospitals - if one has hospitals, why cannot one have a small volunteer pet hospital, or a small volunteer clinic devoted to some outre branch of medicine which is done on a voluntary basis.

On the test applied by Justice Sackville, one would not even include them, because one would say, well, if it is a small non-profit organisation which does not have the - it has to have a much higher degree of system and regularity than if it is a large one. So, we would submit that this is a good test case for raising what is a very important overall issue, which is where the lines are to be drawn under these definitions in relation to non-profit activities and, once the extension is made to non-profit activities, it is a difficult question how one applies cases decided under the constitutional definition of the words "trade or commerce" to cases where one is dealing with a completely different meaning of them.

I will not take your Honours to the various passages about money, which are probably unnecessary, but may I just make one other point. So far as the word "in" is concerned, a number of the judges in the Federal Court referred to Nelson and the "in trade or commerce" aspect, and the respondents have placed great emphasis on the relationship between Dr Roberts and NARF, but the point we emphasise, though, is this; if one finds, as we say one must, that the activities of NARF are trade and commerce, then the activities of Dr Roberts in making the speeches, providing the tapes and so on at their fund-raising meetings are very much at the root of their trade and commerce.

This is not the case like the example in Nelson of the truck driver who was engaged in trade and commerce, of course, who gives a misleading hand signal, the misleading hand signal not being in the trade and commerce, although it occurs in the course of carrying out trade and commerce. Here it is the very activity which is the trade and commerce - the raising of money from the public - in which the representations are made. So, there is no problem with being "in trade and commerce" once one establishes that NARF was carrying on a business.

The evidence is there. It raised $10,000 in one year. It was seeking to raise more money. Its efforts were described by his Honour as being something of a failure, or unsuccessful, which rather suggests that the amounts involved are not necessarily to be used to show that it was not carrying on a business - it was certainly trying to - and we would submit the mere fact that there is a cause - note that it is not a religious cause here, it is independent of religion, because no religious body says, as one of its tenets, that this particular rock formation is Noah's Ark or is not Noah's Ark - so, it is a body seeking to put a particular viewpoint which its members held, raising money for that purpose, and a person who is, in substance, one of the founders, for whose purposes the money is being raised, making speeches to the public at its functions to raise money, the bulk of which is likely to come to him for those trips.

CALLINAN J: Mr Bennett, if you are right about that, a politician selling his political manifestos would also be in business.

MR BENNETT: Well, your Honour, one has to look at every case. But it may well be. The real problem with politicians is that, in most cases there, as was said in Unilan v Kerin, in most cases there there would be no misleading and deceptive conduct because there is an assumption made that things said by politicians are in a different category. That was really the ratio of that case. So, one can - it is unlikely to be applied extensively to politicians, and there are obviously reasons of policy why it might not be applied to religions. But if one has bodies which are making objective statements of fact for the purpose of raising money, we would submit that, as a matter of policy, there is no reason why these definitions should not have been intended to apply. We would submit it is an important issue and one which justifies a grant.

GLEESON CJ: Thank you, Mr Bennett. We do not need to hear you, Mr Radojev.

The Court is of the view that there is insufficient reason to doubt the correctness of the decision of the courts below to warrant the grant of special leave. The application for special leave is refused.

Do you resist an order for costs, Mr Bennett?

MR BENNETT: No, your Honour.

GLEESON CJ: The applicant is to pay the costs of the respondent of the application.

We will adjourn now to reconstitute.

AT 2.41 PM THE MATTER WAS CONCLUDED